On 13 July, a WTO arbitrator issued its decision on the methodology Canada may use to fix the level of suspension of concessions or other obligations in the goods sector vis-à-vis the United States if, in the future, the US applies countervailing duties on Canadian goods based on a measure found to be inconsistent with WTO rules. The decision stems from the dispute proceedings in “United States — Countervailing Measures on Supercalendered Paper from Canada” (DS505).
The Arbitrator determined that the appropriate level of nullification or impairment would be determined by Canada in the future based on a prescribed partial equilibrium Armington model if and when the WTO-inconsistent ongoing conduct was used to impose CVDs against imports of Canadian goods into the United States. Canada could then suspend concessions or other obligations in the goods sector at an equivalent amount. The Arbitrator also determined that Canada is entitled to adjust a given level of suspension to account for annual inflation.